M&S Flouts the Rules; Retailer Posts 2.6million Credit Cardsand Ignores Banking Industry Code

The Mail on Sunday (London, England), September 21, 2003 | Go to article overview

M&S Flouts the Rules; Retailer Posts 2.6million Credit Cardsand Ignores Banking Industry Code


Byline: RICHARD DYSON

THE financial arm of Marks & Spencer has become the first major company to break the Banking Code, the voluntary rulebook agreed by the banking and credit card industry.

M&S Money, which is poised to launch its '&more' credit card business in the next fortnight, has ignored the rule that forbids lenders from sending cards to people who have not asked for them.

Within days, M&S will post its new MasterCard to 2.6 million people. In all but a handful of cases, the recipients will not have requested the cards.

Instead, they will be targeted because they are on the company's database of five million store card customers.

The move, seen by rivals as unprecedented and extremely aggressive, will at a stroke transform M&S into Britain's sixthbiggest credit card company.

Up to [pounds sterling]4 billion of fresh credit will be offered to consumers who have not asked for it.

The Banking Code has been drawn up and modified over several years to promote good practice and fairness to consumers.

The code clearly states: 'We will send you a card only if you ask for one or to replace a card you already have.' M&S's card launch is being overseen by Laurel Powers-Freeling, formerly of Lloyds TSB and now chief executive of M&S Money.

She argues that the new &more From Page 15 have known it was wrong,' she says.

Michael Cooper runs CPH Financial Advisory Services in Macclesfield, Cheshire, the company behind endowment.net.

He says he has 3,500 cases on his books and takes a 20 per cent share of any settlements.

'If you have a busy life and you don't want the stress of managing a complaint yourself, come to someone like us,' he says.

In common with other endowment chasers, Cooper claims a high success rate.

But CPH will not take on every case, boosting its chances of success.

Cooper says: 'I don't get paid until you get a settlement, so I have to ensure a case is viable. A little endowment of [pounds sterling]5,000 is of no interest.' As a qualified adviser, Cooper is at the reputable end of the spectrum of endowment chasers. But anyone can set themselves up and offer to help cards are simply 'replacements' or 'upgrades' for existing store cards.

But in practice, the cards are completely different - store cards can be used only in M&S shops and typically impose low spending limits.

The new cards can be used anywhere and the average spending limits are likely to be at least doubled, according to M&S. …

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